Presentation on theme: "Economics and Organisations - Week 8"— Presentation transcript:
1 Economics and Organisations - Week 8 Power and conflict in organisationsBest readings are:Gareth JonesMary Jo HatchMorgan – Images of OrganisationReading pack on networks
2 Defining Power in Organisations Robert Dahl “A has power over B to the extent that he can get B to do something that B would not otherwise do”“Organisation power is the mechanism through which conflict gets resolved”It is “the ability of one person or group to overcome resistance by others and to resolve conflict and achieve a desired outcome”“Power is control of relevant resources”“To increase power an individual or group must:Decrease dependence on othersIncrease others dependence on self (group)”
3 Power and AuthorityPfeffer has a resource-based view of power, in which organisation structure determines who controls critical resources.‘Authority’ derives from an individual’s position in the hierarchy.Authority is thus directed downwards in an organisation whereas other forms of power are multidirectional.Authority is power that is legitimised by the legal, structural and cultural foundations on which an organisation is based.
4 Authority in PracticeThe exercise of authority has fewer costs; organisation members implicitly accept the authority relationships when joining.Where other forms of power are needed by those in authority the organisational structure is under threatAuthority usually visible by symbols, such as:Titles and ways by which people are addressedLocation, size, furnishings etc of officeScale of perks, salaries, bonuses etc.
5 Theories of Power in Organisations Sociological approaches – who holds powerPolitical approaches – how a particular decision was madePopulation ecology and Institutional theory – concerned with the distribution of powerNetwork approach to power – centralityConsider four political approaches
6 Strategic Contingencies Theory Power derives from the ability to provide something that the organisation values highly, such as a particular skill, valuable contacts, knowledgePfeffer views this as control over uncertainty, Hickson, Hinings et al, stress power comes from control of uncertainty not uncertainty itselfSee example in Hatch re maintenance engineers in cigarette factory
7 Resource Dependence Theory Power is control over key resources – an extension of Strategic ContingenciesAn organisation may increase its power by controlling more of its resources – buying a supplier; making itself not buying – vertical integrationResource Dependence Theory views power as a ‘distribution of opportunities to manage uncertainty’
8 Hidden Power or the ‘power to set the agenda’ Power is ‘controlling the premises of decision making’ – ‘unobtrusive’ powerBacharach and Baratz argue one aspect of power is the ability to ensure that certain issues are not raised – power is used to suppress certain issues.E.g. Profits could be increased by cutting costs either/or by increasing sales. If Sales Dept are powerful they ignore the possibility of cutting costs – they want their lavish expenses!
9 Feminist Critique of Power Feminists drawing on Marx argue that power is used to marginalise the powerlessPostmodernists attack this position by attempting to ‘give voice to the silenced’Feminist view sees power being exercised in all situations of domination/submissionGender seen as the ‘patterned, socially produced distinctions between male and female’Power seen to be exercised on basis of gender and stereotypes of male/female
11 Power and Networks Organisations seen as ‘Networks’ Network ‘is a set of relations or ties among actors’ – individuals or organisationsAll the actors in an organisation can be represented in various networks, such as: work flow, communication, friendships
12 Background to Networks Three factors have greatly increased the interest in network analysis in last 20 yearsThe emergence of ‘New Competition’ – e.g. Third ItalyRecent technological advances – instant data exchange, new production techniques, ERPSMaturing theoretical study of networks – mathematical and conceptual
13 Substantive Themes within network Analysis Power within organisations can be understood in terms of relationships within a networkPower between organisations, particularly where there are many small organisationsRelationships between companies, suppliers, customers – not simply ‘arms-length’ contracts – strategic alliancesAs a means of structuring within an organisation, particularly for developments and new initiatives – flatter structures
14 Power and centrality in networks Power can be represented by position within the net work – ‘Centrality’Within an organisation many networks can exist, e.g. information flows, work flows, friendships, senior executivesCentrality can be an analytical tool to identify and measure powerFor measures of centrality in more detail, see John Scott
16 Measures of Centrality - Degree Degree – the number of points to which a point is adjacentA central point has high degreeThis is a measure of local centralityMultiple points with same degreeCan be modified into a relative measureDegree of 25 out of 100 nodesDegree of 25 out of 50 nodes
17 Measures of Centrality - Closeness ‘Geodesic’ represents the shortest path between two points on a sociographCloseness is the sum of all the geodesics for one pointCloseness – This measures the shortest distance between one point and every other pointThe point that has the lowest closeness measure is most central
18 Measures of centrality - Betweenness Betweenness – The extent to which a particular point lies between all the other points in the sociograph‘A point is dependent on another if the paths that connect it to other points pass through this point’Betweenness reflects being a broker or ‘gatekeeper’Calculation is techically complex – powerful computer programs
19 Test of Centrality and Power Study by Brass and Burkhart of 140 non-supervisory workers, their supervisors and high level managersAll three measures of Centrality were calculatedPower also measured by direct questioningThree ‘units of reference’ used: sub-unit, department and entire organisation
20 Results from Brass & Burkhart All degree measures correlated significantly with supervisors’ power ratingsMost of closeness and betweenness measures also significantly correlatedDepartment was most significant unit of referenceSimple degree measures performed better than more complex measures
21 Tactics for playing power politics Increasing IndispensabilityIncreasing non-substitutabilityIncreasing centralityAssociating with powerful managersBuilding and managing coalitionsInfluencing decision makingControlling agendaBringing in an outside expert
22 Conflict in Organisations Conflict is ‘the clash that occurs when the goal-directed behaviour of one groups blocks or thwarts the goals of another’Organisation conflict “is an overt struggle between two or more groups in an organisation… It usually centres on a state or action that favours one social actor over others”
23 Brief History of Conflict Conflict is Dysfunctional. Early theorists argued that conflict is wholly dysfunctional. Conflict should be overcome, and theorists suggested means to do thisConflict is Natural. Lou Pondy (1967) Conflict may be unpleasant but it is an inevitable part of any organisationConflict is Functional. Pondy further suggested that some aspects of conflict can be positive, e.g. conflict is psychologically healthy
24 Optimal Levels of Conflict Optimal conflictStimulate conflictReduce conflictPerformance levelLow level of conflict high
25 Interunit ConflictHumans employ psychological defence mechanisms to avoid open conflictMany opportunities for open conflict are not takenWalton and Dutton have a model for identifying/predicting interunit conflict
26 Walton and Dutton Model Context Local Conditions Observable indicesenvironment group characteristics open hostilityStrategy goal incompatibility distrust/disrespecttechnology task interdependence info distortionsocial culture rewards and performance ‘we v they’ rhetoricculture common resources lack of cooperationphysical structure status incongruity avoid interactionjurisdictional ambiguity communication obstaclesindividual differences
27 Pondy’s Model of Organisational Conflict Stage 1: Latent ConflictStage 2: Perceived ConflictStage 3:Felt ConflictSources of Conflict:InterdependenceDifference in goalsBureaucratic factorsIncompatible performance criteriaCompetition for resourcesStage 4: Manifest ConflictStage 5: Conflict Aftermath
28 Other Theories for Conflict Marxist theories - class-based - workers v capital(ists)Leads to Braverman - ‘deskilling’ hypothesis i.e. systematic fragmentation and specialisation of work giving more power to managementLabour-market theories - Primary and Secondary markets for labour. In primary wages and conditions are good; whereas in secondary, both are poorOrganisational contradictions - units adapting to different environments; contradictions with past
29 Concluding Comments Power and conflict are vast and complex subjects Vital to an understanding of how organisations operateDifferent theories interpret ‘facts’ in different waysNeed to read!!
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